Workers can still cut 2017 taxes with these retirement accounts
Our daily roundup of retirement news your clients may be thinking about.
Clients can still cut 2017 taxes with these retirement accounts
Clients who want to reduce their 2017 tax liability can still make deductible contributions to a traditional IRA until the tax-filing deadline, according to this article on CBS Moneywatch. They also have the option of contributing to a health savings account and deduct the contributions on their 2017 returns. Small business owners can also open a self-employed 401(k), SEP IRA or SIMPLE IRA plan and contribute for 2017, as the contributions will be tax-deductible.
What if your fee focus is hurting your 401(k) plan?
A focus on fees is important in the investment world, but it can actually be overdone. For instance, if employers focus too much on their retirement plan fees, it can potentially bring an undesirable impact on the plan and its participants, writes an expert for Forbes. Companies who consider moving to a new provider or change investments to curb the costs should make a number of considerations, such as the proprietary products required, employees as prospects, the passive investments to be use and the possible profit they will get from the decision, writes the expert. While low fees are important, they are not the only element that impacts your employees on their journey to retirement, the articles says.
When your estate plan may be worthless
Clients need to review their estate plans if they do not have critical components, such as a will and a financial power of attorney, according to this article from Kiplinger. Their estate plan also needs a checkup if they haven't updated their beneficiaries or executors in years and it does not include any plan for their personal items. Another indicator that their estate plan is outdated is if they haven't reviewed their life insurance policy, or they make the mistake of naming a family member, not a professional to be the trustee of their estate.
This is the simplest, most successful way to save enough money for retirement
The initial contributions to retirement accounts may not yield substantial returns, but clients who save diligently to their accounts and invest in the long term will reach a "crossover" in which the returns will exceed the contributions they make, writes an expert for Money. "As your investment earnings begin to compound over time... they become an increasingly important source of growth in your account balance," writes the expert. "At the end of five years, your investment gains amount to roughly a third of the monthly amount you’re contributing on your own."